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The Keywords of Business in Denmark: Flexible and Laid-Back

Working in Denmark opens up new opportunities for expats. Both its location in the heart of northern Europe as well as its thriving economy are good reasons for taking up employment in Denmark. InterNations offers info on working in Denmark, including the job search, the current economy, and more.
Doing business in Denmark is characterized by flat hierarchies and flexibility.

What is the “Flexicurity Model”?

The Danish labor market is characterized by a high degree of flexibility and the social welfare system. This phenomenon is known as the “Flexicurity Model” which in essence is a combination of Denmark’s market economy and the traditional Scandinavian welfare state. 

The Flexicurity Model allows for very high job mobility within the country. There are very few hurdles for those who wish to switch jobs, as this does not affect, for instance, pension entitlements. As such, the aim of the model is to give people working in Denmark employment security rather than job security. Expats who lack basic proficiency in Danish might not have as easy a time changing jobs, though.

A Relaxed Working Environment

It is quite common for companies in Denmark to have a flat organizational structure and open communication between employees and management. Regardless of position, everyone is on a first-name basis, and in most companies everyone has a say when decisions are made.

As a result, teamwork is highly valued and considered a key soft skill for expats on the job hunt. At the same time, you will be expected to work very independently and to bring efficiency, creativity, and motivation to the table.

Of course, a healthy work-life balance is essential to any expat, and in Denmark you needn’t be concerned. The OECD’s Better Life Index has Denmark at an excellent 9.1 out of 10 when it comes to work-life balance, which is the second highest among all OECD countries, beaten only by the Netherlands’ 9.4.

Flexible work hours are very common as most employers trust their employees to get their work done. Thus, you may be allowed to work from home or to stay late if, for instance, you have some important personal matters to take care of in the morning.

An Introduction to Taxes in Denmark

If you are new to Scandinavia, you may be taken aback by Denmark’s high taxes. Twice a year, you will receive a letter from the Danish tax authorities (SKAT) with a tax assessment notice (Årsopgørelse), in which you are to check and confirm information about, for example, your income for the coming year. This can also be done online, and Life in Denmark provides information on this topic. Still, if you speak no Danish, you should get your colleagues to help you.

As is the case in all Scandinavian countries, taxes are used to finance Denmark’s public welfare programs. So, while you will be paying upwards of 40-50% of your income in taxes, this also means you have free access to health and education services.

If you are a researcher or an employee in a profession on the positive list, you may qualify for a special tax program under which you get an income tax rate of around 32% for up to five years. Contact SKAT to find out more, and make sure to familiarize yourself with their latest Tax in Denmark publication, which specifically aims to explain the Danish welfare system to newcomers.

The Right Pension Plan for You

There are a few different pension schemes in Denmark. Which ones apply to you really depends on your employer, your field of work and, frankly, you. There are pension schemes offered by the state as well as semi-private and private pension schemes, which you might receive through your employer or take out individually. They include the following:

  • The state pension scheme is paid by the government based on taxes and is of course part of Denmark’s social security system.
  • The Danish labor market pension is another statutory scheme, which is usually a fixed percentage of your wage.
  • Collective pension schemes are part of a collective agreement in a specific field, usually negotiated by unions.
  • Company pension schemes are usually agreed upon on an individual basis between the employer and the employee.
  • Private pension savings schemes have to be set up individually between you and your bank, for instance.

You only gain the right to benefit from the public pension schemes if you have been a resident in Denmark for a certain number of years. Many expats are additionally covered by company pension or collective pension schemes, which are often part of their employment contract.

 

We do our best to keep this article up to date. However, we cannot guarantee that the information provided is always current or complete. 

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